We all know that lawyers make great money, but being a law student is a very different experience. Indeed, law students endure the college experience longer than most and have to wait a few more years before cashing in on their education. Sure, their monthly statement cycle will make them smile once they’re practicing law, but studying law is a different story.
So, what can law students do to help make their money stretch until they earn their law degree? We’ll discuss a few ways that future lawyers can save money in the here and now.
Set clear financial goals.
Setting financial goals is the first step to achieving financial freedom. As a lawyer, you might like to open a practice someday. Well, if you plan to open a small business, saving for that should be one of your current financial goals. It’s a good idea to speak with a financial or investment adviser to help with your financial planning.
Malliha Wilson is a great example of what you can do when you have a plan for your finances. In all fairness, she did serve as a special legal advisor to the Investment Management Corporation of Ontario, so she understands business and finances. However, that makes her an even better role model for how to set financial goals.
Malliha knew she wanted to launch her own law firm, so she began saving and planning years before founding Nava Wilson LLP. Now she’s the founder and senior counsel of her own legal practice and continuing her fights for human rights and labour law in Canada—a managing partner rather than an associate.
The most important thing you need to do while in law school is work on building your savings. Even if you already have a savings account, it’s wise to shop around to see if you can find a bank account that offers a higher interest rate and better incentives and features.
As you know, savings accounts get an annual percentage yield (APY), and the interest rate varies from one financial institution to the next. It’s worth it to do your homework to find the company that offers the highest APY as that’s free money added to your savings account every year. You also should be mindful of monthly maintenance fees as these often catch account holders by surprise.
Your money matters, so don’t just open a personal savings account with the first bank you see or the one closest to your house. Do your homework and find the best bank for your needs. Different financial institutions offer varying APYs, minimum balance amounts, and more. In other words, choose wisely because not all banks are created equally.
Work on your credit score.
One of the most important financial tips for law students is to work on their credit scores. The better your credit is, the easier it will be to qualify for credit cards, mortgage products, car loans, and more. Every mortgage lender in the U.S. advertises that they’re an equal housing lender, but their equal housing lending doesn’t extend to bad credit cases. With that being said, it’s imperative to closely monitor your credit and keep your borrowing to a minimum.
The first step to managing your finances is to determine your financial goals. It’s also a good idea to work as many hours as your studies allow and put 10 to 20 percent of your earnings in a savings account. Also, remember to do your due diligence when choosing a financial institution to bank with. Furthermore, work on your credit so you’ll be a qualified borrower when it comes time to buy that big house or a luxury car. The frugality you practice now will serve you well when you start making the big bucks.